SEEMINGLY insatiable worldwide demand for Australian Wagyu beef, and the price boost that has afforded cattle producers using Wagyu genetics, has set the scene for unprecedented growth for an Australian cattle breed in the next five years.
More than 400 delegates - the largest ever for a Wagyu conference in Australia - were today told forecasts are for 821,000 Wagyu joinings by 2020, with a 276,000 head turnoff or 74000 tonnes of beef produced.
The Australian Wagyu Association conference, called the 2016 Wagyu Revolution, is being held at the Hunter Valley.
In 2011, Wagyu joinings were at 90,000 and by 2014 that had jumped 24 per cent.
Association membership increased by 32pc last year and registrations of cattle by more than 20 per cent.
The breed’s ten-year vision includes comprising five per cent of the genetic base of the Australian national beef herd - currently it sits at 1 to 2pc.
AWA chief executive officer Graham Truscott said the forecast growth meant 22,000 bulls would be required, or 4400 per year, all with good estimated breeding values and indexes to predict performance.
The opportunities across all sectors of the supply chain appear phenomenal.
The big question everyone is asking is whether that growth will saturate markets.
Meat and Livestock Australia’s managing director Richard Norton kicked the conference off with a discussion on positioning premium quality beef.
Many of Australia’s end markets were seeking a point of difference, he said.
“The big emerging trend is that as incomes increase, consumers are more likely to expect greater taste and more enjoyment from eating beef,” he said.
“Wagyu clearly has a big role to play in that.”
Mr Norton said the challenge for the breed was to channel the increased turnoff into premium markets and the path to that was to ‘know your consumer and your brand.’
He told marketers to be clear about why consumers buy Wagyu and the status a brand brings.
“Strong brands that connect with consumers deliver premiums - consumers want a reason to spend greater dollars,” he said.
The concept of markets within markets was made clear during Mr Norton’s presentation.
He gave a comprehensive insight of many of Australia’s major beef trading partners and the drivers and limitations they currently present.
In North America, for example, consumers are familiar with highly marbled beef and Australian product is well-positioned.
Opportunities at the higher end retail and food service are somewhat untapped at this point.
Mr Norton believes the future here will be about very niche offerings - grassfed Wagyu perhaps?
In the Middle East, westernisation and an ultra affluent consumer segment are the drivers, while limited knowledge of the product is a restraint and substitution a big challenge.
In China, there is an extremely positive perception of Wagyu, and of Australian product, but again substitution, along with inconsistent supply, are the brakes.
Rising middle class consumers with a positive perception are the drivers for South East Asia. Online opportunities are fast emerging in Singapore and Thailand. SEA overall has a very bright future as long as there is consistent supply.
In Japan, we have a unique position in that our marbling is better than the United States but not as much as the local product.
However, the Japanese economy is still frail and there is stiff competition from other high quality foods.
The bottom line in Japan is that highly marbled beef will always be in demand by 120m-plus people.
The Wagyu conference continues until Friday, with tours to properties taking up the latter part of the week.